GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday posted its best quarterly profit in about a year as it said artificial intelligence (AI)-related demand for advanced wafers helped boost factory utilization.
Net profit for last quarter expanded about 17 percent to NT$1.97 billion (US$63.74 million) from NT$1.68 billion in the second quarter, but down 33 percent from NT$2.95 billion a year earlier.
Earnings per share rose to NT$4,12 from NT$3.52 in the previous quarter, but were lower than NT$6.18 a year ago.
Photo: Lin Jin-hua, Taipei Times
Gross margin sank to 18.4 percent, from 25.8 percent in the second quarter and 30 percent the previous year, due to increasing depreciation costs at its production lines in the US, Italy and Japan, as well as higher energy costs and unfavorable exchange rates, the company said.
The company said that, to deal with increasing manufacturing costs, it was discussing with customers about adjusting wafer prices.
Gross margin is expected to improve this quarter, GlobalWafers chairwoman Doris Hsu (徐秀蘭) said at an earnings conference, adding that an ongoing investigation into the semiconductor market under Section 232 of the US Trade Expansion Act of 1962 is the only major uncertainty this quarter.
The potential semiconductor tariffs have prompted customers to increase demand for the company’s US wafer capacity, Hsu said.
The US market would be the company’s main growth engine in the mid and long term, she said.
The company’s Missouri plant started initial production this year and is expected to enter volume production of silicon-on-insulator wafers next year, she said.
GlobalWafers is aggressively qualifying new products for wafer production at its new plant in Texas, she added.
The company has seen the utilization rate of its 12-inch wafer facilities rise to about 95 percent, excluding those new lines, Hsu said.
Demand for small-diameter silicon wafers remains weak, she said.
Factory utilization rate for 8-inch wafers stood at 80 percent, while that for 6-inch wafers was lower than 70 percent, she said.
Global supply capacity for less advanced wafers still surpasses demand by 5 percent to 10 percent, Hsu said.
The company has observed more encouraging signs for next year, Hsu said.
It expects to receive additional government subsidies totaling US$100 million from the US and Europe next year, she said, adding that those subsidies would help strengthen the company’s financial flexibility.
The company said its capital investment spree has entered a consolidation phase after most new factory constructions were completed, implying an increase of the company’s profitability in the following quarters.
The company’s inventory level has returned to a “very healthy” range seen in late 2023 and early last year, reflecting solid inventory management and a stable foundation for growth, she added.
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